Paper Number

1067

Paper Type

Short Paper

Abstract

This paper delves into the pivotal role of Generative Artificial Intelligence (AI) in harnessing network effects, offering a solution to the classic "chicken-and-egg" dilemma. Network effects, characterized by the increasing value of a product or service as its user base grows, are crucial for success in the contemporary digital landscape. We use dynamic system and agent-based models to show the impact of AI-driven bots on the online platform growth, comparing two marketplaces one with bots (Marketplace A) and one without (Marketplace B). By using synthetic data, we demonstrate that Generative AI showcases a revolutionary potential to amplify network effects. Finally, we evaluate the economic value of using AI bots and compare it with a platform solely based on user-generated content and organic user growth. The results imply that the economic values of the two marketplaces are converging in total.

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Jun 14th, 12:00 AM

Leveraging Generative AI for Amplifying Network Effects and Resolving the "Chicken-and-Egg" Dilemma

This paper delves into the pivotal role of Generative Artificial Intelligence (AI) in harnessing network effects, offering a solution to the classic "chicken-and-egg" dilemma. Network effects, characterized by the increasing value of a product or service as its user base grows, are crucial for success in the contemporary digital landscape. We use dynamic system and agent-based models to show the impact of AI-driven bots on the online platform growth, comparing two marketplaces one with bots (Marketplace A) and one without (Marketplace B). By using synthetic data, we demonstrate that Generative AI showcases a revolutionary potential to amplify network effects. Finally, we evaluate the economic value of using AI bots and compare it with a platform solely based on user-generated content and organic user growth. The results imply that the economic values of the two marketplaces are converging in total.

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